Mission:    SECURITY (V)

Damage control for identity theft

How can I start reclaiming my life?

 

NEW YORK (Armchair Millionaire) - Dear Armchair Millionaire: I just discovered that my identity was stolen. I'm in a bit of a panic -- what should I do to protect myself?


There's no doubt that identity theft -- when someone uses your personal information such as Social Security, credit card or driver's license numbers to make purchases or open accounts -- is widespread in the U.S. A comprehensive study by the Federal Trade Commission found that there were nearly 10 million victims in 2002. All told, identity theft cost businesses and individuals nearly $50 billion in that one year alone.


Behind these statistics are real-life stories, such as these from the Armchair Millionaire community:

"I have had several credit cards opened in my name. One person ran up a $1,300 bill on one credit card. I have a fraud alert on all my credit reports now." -- Jeff B.


"I have had credit cards that have not been used for some time suddenly appear with balances. I canceled the cards and was not penalized and also asked the credit bureaus to put a fraud alert on my file. I am also checking my charges on the Internet almost daily as this will probably happen again." -- Steve


If you think you've had your identity stolen, follow my checklist of the actions you should take now to recover your good name.


The Armchair Millionaire's Checklist for Recovering from Identity Theft


Get organized. You're going to need to navigate a bureaucratic maze to fully recover from identity theft, so get ready by organizing all your credit- and identity-related information.


File a police report. Include as many details as possible. Get copies of the report to send to your creditors, who may require proof of the crime.


Put a fraud alert on your credit file. Contact the fraud department of one of the three major credit bureaus and ask that a fraud alert be placed on your credit file. This alert requests creditors to contact you before opening any new accounts or making any changes to your current accounts.


As soon as the fraud alert is in place with one credit bureau, the other two will be automatically notified to place alerts on your files with them. The three bureaus are Equifax (www.equifax.com or 888-766-0008), Experian (www.experian.com or 888-397-3742) and TransUnion (www.transunion.com or 800-680-7289).


Fill out an ID theft affidavit. This affidavit is offered by the Federal Trade Commission to make it easier for identity theft victims to document accounts that have been opened or used in your name. Many creditors will request a copy of this affidavit to investigate your claim. You can find a link to the affidavit at www.consumer.gov/idtheft/.


Contact your creditors. Contact the fraud department of each company where you believe your accounts have been tampered with or opened fraudulently. This can include credit card companies, banks and mortgage companies. Report the fraud and close each account. Make your requests in writing, sent by certified mail, return receipt requested, so that you can document what each company received and when.


Follow up. Keep a close eye on your credit report for any new suspicious activity, particularly in the first year after you've been a victim of identity theft. Visit www.annualcreditreport.com to order copies of your credit report from each of the credit bureaus.


THE BOTTOM LINE: With your access to loans, housing or even job opportunities on the line, identity theft is serious business. If you become the victim of ID theft, take the right steps immediately to minimize the damage.


THE ARMCHAIR MILLIONAIRE WEEKLY SURVEY: What are your biggest financial fears? Log on to www.armchairmillionaire.com and let us know.

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Edit:
Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, "The Armchair Millionaire," was published in 2001.
Today, ArmchairMillionaireis a fast-growing community of common sense savers and investors.

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